Premera CEO Jeff Roe transforms healthcare around the customer experience

If you were the president and CEO of an organization on the receiving end of a $250 million, one-time tax refund brought about by changes in the corporate tax structure, what would you do?

If you were Jeff Roe (MBA 1997) at Premera Blue Cross, you would seek out a way to benefit your customers. And so Premera is investing $250 million over five years to help stabilize the individual market, improve access to healthcare in rural areas, and provide more support for addressing behavioral health issues across its coverage area.

“We have a unique opportunity, and a significant obligation, to improve the healthcare system. Using these funds, we can improve our customers’ lives by making healthcare work better,” says Roe. “This is what drives me.”

Up to the task

Roe earned bachelor’s degrees from the UW in political science and economics before joining Premera in 1996 and completing his MBA at the Foster School. He rose to co-president of Safeco Insurance before returning to Premera, becoming president and CEO in January 2014. Along the way he has been honored as Distinguished Alumnus of the UW Department of Economics, has served on a half-dozen boards (and is currently vice-chair of Foster’s Advisory Board), climbed Mt. Rainier and completed an Ironman. So he’s not afraid of exertion.

Which is good, given his industry’s vast need for improvement. Roe points out that the US ranks 37^th (between Costa Rica and Slovenia) among developed nations for overall quality of care. It’s not due to lack of spending. “Healthcare has become so expensive for people—averaging $20K per year,” he says. “This makes it hard for businesses to be competitive.”

The value gap

Employers entered the picture during WWII, when Henry Kaiser found a workaround for wage controls imposed on labor by creating a benefit (healthcare) that’s tax exempt. Today, 155 million Americans access employer-provided healthcare, but it doesn’t function like a normal marketplace. “Consumers don’t have transparency of cost or quality, and there’s less interest in total spend because they’re not funding it,” says Roe.

He breaks down the challenges into four parts: 1. Cost – healthcare is too expensive; 2. Quality – people don’t always get the care they need; 3. Waste – people sometimes get care they don’t need; 4. Experience – healthcare interactions are sub-optimal.

“The problem is widely recognized, but it’s hard to address because it’s such a personal issue involving so many stakeholders,” says Roe. “Getting everyone to act in concert is challenging.”

Change starts from within

Leaders who empower their employees to deliver a great customer experience are an inspiration for Roe, who believes more in people than in organizations. “The people closest to the work will generally have the best answers to the problems we face,” he says. “So if I can empower them, it’s better than what might be prescribed from the top.”

Roe set out to transform the Premera culture in significant ways, and so far employee engagement has gone up 80 percent in the last two years, setting the foundation to identify more deeply with the customer.

The win/win of problem-solving

Here’s an example. When Premera shifted its focus to customer experience, even the claims team—which does not work directly with members—asked themselves: “How can we get closer to the customer?”

This customer-service mindset led to a dramatic improvement in the way that member-submitted claims are processed. The team found workarounds that resulted in 50 percent fewer returned claims and a massive drop in member frustration.

Roe’s efforts to transform Premera into a customer-focused enterprise—and an exemplar for an industry that needs some solutions—are a work in progress.

But, he says, the incremental improvements such as those devised by his claims processers have been good for the team, good for the customer and good for the organization. And the multiplier effect is potentially transformational.

“There are hundreds of these examples,” Roe adds. “And I’d count it as a loss for our customers and the company if I weren’t able to encourage that kind of improvement.”

-Eric Nobis